eron/FUTO are not trying to dilute the term Open Source, they are trying to address a real problem that Free Software and Open Source face, and that we do need to find a solution for. their initial wording may not have been ideal, but that is because there is no defined terminology, and because the point is to be close to open source as is possible.
this is not an out of touch view. on the contrary. what is out of touch is to believe that Open Source is perfect as it is, and nothing should be changed about it.
the problem that FUTO is trying to address is the commercial exploitation by large companies (like AWS) at the expense of the original creators. a problem that several companies (redis, mongodb, elasticsearch, zerotier, terraform, vagrant, and many more...) in recent years had to face, causing them to change their license.
it's a problem that bruce perens is also trying to address:
https://news.ycombinator.com/item?id=38783500
"What comes after open source? Bruce Perens is working on it"
btw: i recently asked bruce about this and he said that AI now changes everything and he wants to wait and see how that will affect Open Source.
it is not obvious that FUTO's approach is the right one. it is an attempt at addressing the problem, and i expect that it will take more such experiments to shake out what the best approach to this problem really is.
i wrote about this before:
https://hn.algolia.com/?query=em-bee%20futo&type=comment